Progressivity and proportionality in income tax in Ecuador

Abstract

The purpose of this article is to determine whether the principles of progressivity and proportionality are complied with in the income tax, as it is established in the Ecuadorian tax system. To fulfill this purpose, a methodology is applied based on a bibliographic review of academic literature on variables such as income tax, progressivity, and proportionality, as well as on a documentary review of official information and national tax regulations. It is concluded by ratifying that both the principle of progressivity and the principle of proportionality are complied with in the application of income tax in the Ecuadorian tax system, particularly when differentiated percentages are established for the different incomes of individuals. However, it is in the 25% rate applied to the taxable income of corporations where there is evidence of non-compliance with the principle of progressivity.